Salt Lake evening Democrat. [volume] (Salt Lake City, Utah) 1885-1887, 1887-06-13

but they did not begin to exist until more
than half century had elapsed after the
promulgation of the Declaration OF lnde-
pendence . The contrast with the pres
ent time is so marked that it is patent
to all, and scarcely needs mention.
Take the item of banks. Instead OF
three banking corporations, We have
nearly if not quite a thousand times as
many organized under national law, TO
say nothing about those organized under
the laws of the various States. Instead
of one charter in thirty years in one State,
we find that in the single commonwealth
of Texas eighty charters were granted IN
ninety days in 1885,. The most signih-
cant fact, however, is the rapidly increas-
ing proportion of all the resources OF the
country which belongs to corporations.
Hon. Abram S. Hewitt stated a few
years ago that corporations were modern
institutions, that private corporations did
not exist fifty years ago, but that they
now owned from one-third to one-half of
the capital of the civilized world This
is not accurate in every respect, but it is
important as registering the results OF
the observation of an active business
man. Another authority has estimated
that the wealth of corporations in the
United States is increasing three or four
times as rapidly as that of private con-
Germs. While opinions like these are
more or less uncertain, they are of value
because in the main they harmonic
with the results of all investigations
which have been made. While
there is, then, history OF joint-stock as
sociations of capital with limited liability,
which may be traced back for four
hundred years, and some features OF
which are still older, it is true that cor
poratioDs devoted to gainful pursuits
have only in very recent years assumed
vast Importance in the economic life of
the world. The question now arises
What are the causes which have led to
such momentous changes in the organi-
zation of industry during the past fifty
years? The answer is not difficult.
Owing to discoveries and inventions,
especially the application OF steam TO
industry and transportation, it became
necessary to prosecute enterprises Of
great magnitude such as could not be
compassed by the resources of an indi-
vidual or a combination of individuals in
the ordinary copartnership. This applies
especially to the means of COM
munication and transportation. To
provide these instruments of economic
life has been generally re-
garded as one of the functions
of government, municipal, State, and
Federal. There were two alternatives.
This might be done either directly, or
the duty might be transferred to private
corporations. There was in either case
the same problem to solve, namely, the
management OF enterprises OF unparal
leled magnitude by delegated action. In
one case managers would be chosen by
the citizens to promote the welfare of the
community. The electors would have
the prosperity Of their business interests
more or less at stake, and would in so
| far have a motive to induce them either
themselves to select good men to manage
such important undertakings or to see
that their elected agents appointed such
| men, as the case might be. The man
ayers themselves would as citizens be in
| terested in the success of the enterprises
intrusted TO them. On the other
hand, there would be the danger
of an abuse OF public trust.
In the case OF the adoption of
the corporate principle, the stockholders,
| in so far as their interests are not merely
| speculative, must desire to elect directors
who will so manage their property that
it will yield large dividends, while the
directors, themselves stockholders, wish
return on their investment. On the
other hand, as has already been pointed
out, the interest OF the directors is often
not identical with that of the property
which they manage, and they are, as ex-
perience demonstrates, oftener faithless
to their trust than public servants, while
the opportunities for their exposure and
punishment are less favorable They
may wish to injure the undertaking in
which they exercise control in order to
buy shares at lower price than they are
really worth, or they may desire to sacri-
flee its future to the present for the sake
of high dividends, so that. the price Of
stock may rise unduly, thus enabling
them to unload" with profit on too
eredulous public. Again, directors NAV
find it to their advantage to neglect
their interests as stockholders in a cor
poration in order to promote their in
terests as individuals or members of
firm engaged in some other enterprise.
An example is seen in railway directors
who give themselves special freight
rates. So in the enthusiasm for IaiSse=
fare, which it was held was certain to
usher in an era of peace and wealth, we
abandoned the attempt to perform many
public functions which coporations were
only too anxious to assume. Thus did
we transfer to corporations our railways,
and in general all the chief means of
communication and transportation, save
the postoffice, upon which the covetous
eyes of promoters have been fastened,
happily in vain.-RichGrd T. Fig, in
Harper'S Magazine for June.